Whenever i turn on a flashlight, or see smoke or dust, In Half-Life 2 close up. the frame rate slows down from a 32 to a 22 or even a 16. if i aim and simply shoot to the ground, it creates dust, and it really slows me down, and the sound skips. Other than this, game play is fine. Lights, flash light, and stuff using some form of image to display it is the cause of this.

Yes as above you need a graphics card for HL2 you can easily get away with a < $100 video card like a 8600gt. However you will notice it's limitations very quickly in other games. But judging that you are running onboard gfx now... I would say the 8600gt is fine.